Merrill Lynch & Co. responded swiftly to the wishes of vocal shareholder Karpus Investment Management and will convert one of its closed-end funds into a traditional mutual fund with similar objectives, smoothing the way for the upcoming closing of the BlackRock deal.

Vocal Karpus, the largest shareholder of The Europe Fund Inc., recently asked the fund's board to do something about a trading price that's languished below NAV, reported Dow Jones Newswires. A lifeboat provision allows funds to convert from closed- to open-ended under such circumstances, and Karpus has previously demanded that funds from Scudder and Citigroup do so.

All shareholders will now be asked to approve a reorganization of The Europe Fund into the open-ended Merrill Lynch Eurofund, before the passage of new advisory agreements with BlackRock. Karpus investment strategist Cody Bartlett confirmed that Merrill likely averted a proxy contest to the advisory agreement by addressing Karpus' concerns.  

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